Total compensation for years 1–10 = $24,235 (After year 10 there is no more comp.)

Earning an asset-based trail fee for 20+ years

What is an asset-based trail fee? It's a commission based on the cash account value (CAV, not the lower CSV). The asset-based fee an adviser can earn ranges from 0.1 percent to 0.12 percent. It starts in year six and is paid for as long as the policy is in force.

Let's look at the same example as above and assume the policy earned a rate of return in the 80th percentile of what it would have returned over the last 20 years.

Asset-based fee years 6–41 (using 85 as the assumed age of death) = $105,450

Total compensation for years 1–41 = $129,685

Which one do you like better? $24,235 or $129,685. Even asking the question seems silly.

If the client maximum borrowed from the policy starting at age 66, the total compensation would go down, of course (to $56,638). Again, which would you rather have? $24,235 or $56,638.

If you are not selling EIUL policies with an asset based trail fee, you are missing out on an opportunity to create your own deferred income stream. If you want information on the policies that offer such a trail fee, please feel free to message me.